Global, Indian sugar prices set to surge

by Dave

Macro photograph of a pile of sugar (saccharose)Image via Wikipedia

The Hindu Business Line :

India is likely to play a key role in lending strength to international prices.Deteriorating prospects for sugar crops in two of the world’s largest producers Brazil and India, combined with the world’s largest importer Russia re-entering the market have meant that the price weakness will soon become a thing of the past.

World sugar market fundamentals are set to tighten next season. In 2007-08, world sugar consumption projected at about 160 million tonnes (mt) is set to trail production (171 mt) by over 10 mt which would be available as surplus. There has been a glut of sugar and the large surplus has acted as a lid on prices.

Come 2008-09, the picture is going to change. At best, production and consumption both are going to be finely balanced at about 164-165 mt, leaving little surplus.